Project Cost a Valid Factor for Green Compensation: Supreme Court Strengthens NGT’s Powers

Background of the Case

The Supreme Court of India has reaffirmed and strengthened the powers of the National Green Tribunal (NGT) to impose environmental compensation (EC) by holding that project cost and scale of operations are valid and relevant factors while computing compensation for environmental violations.

The ruling arose from two civil appeals challenging orders of the NGT Western Zone Bench, Pune, which had imposed substantial environmental compensation on two real estate developers in Maharashtra.

Facts of the Two Appeals

Rhythm County Project

  • Project Cost: ₹335 crore

  • Environmental Compensation Imposed: ₹5 crore (approximately 2% of project cost)

  • NGT Order Date: August 2022

Keystone Properties Project

  • Project Cost: ₹76 crore

  • Environmental Compensation Imposed: ₹4.47 crore (approximately 5.88% of project cost)

  • NGT Order Date: September 2022

Both developers challenged the NGT orders before the Supreme Court, arguing that:

  • The compensation was excessive and disproportionate

  • The NGT lacked statutory authority to link EC to project cost or turnover

  • The compensation exceeded the 5% threshold referred to in earlier Supreme Court precedent

Core Legal Question Before the Supreme Court

Whether the National Green Tribunal Act, 2010 permits the NGT to link project cost, turnover, or scale of operations with the determination and enhancement of environmental compensation.

Supreme Court Bench and Decision

A bench comprising Justice Dipankar Datta and Justice Vijay Bishnoi dismissed both appeals, upholding the NGT’s orders in their entirety.

The Court held that:

  • Project cost and turnover are relevant indicators of environmental impact

  • Larger projects inherently create larger ecological footprints

  • Higher profit and scale demand greater environmental accountability

Supreme Court’s Key Observations

Scale of Operations and Environmental Damage

The Court observed:

“If a company has a high turnover, it reflects the sheer scale of its operations. Such a company, if found to contribute generously to environmental damage, its turnover can have a direct co-relation with the extent of damage that is caused.”

The bench emphasized that:

  • Bigger projects mean more land use, emissions, waste, and resource consumption

  • Environmental harm cannot be assessed in isolation from the economic scale of activity

Reliance on Goel Ganga Developers Case (2018)

The NGT relied on the Supreme Court’s earlier judgment in Goel Ganga Developers India Pvt Ltd v. Union of India (2018).

Key Principles from Goel Ganga Developers:

  • As a general rule, up to 5% of project cost may be levied as EC

  • In cases of grave and irreversible environmental damage, higher compensation may be justified

  • In that case, the Supreme Court imposed ₹100 crore EC, amounting to 10% of project cost

Supreme Court Clarifies the 5% Principle

The developers argued that Keystone’s compensation (5.88%) exceeded the 5% limit laid down in Goel Ganga.

Rejecting this argument, the Supreme Court clarified:

“The dictum in Goel Ganga Developers treated 5% of the project cost as a general guiding principle and not as an inflexible ceiling.”

Thus, the Court made it clear that:

  • There is no rigid numerical cap on environmental compensation

  • Each case must be evaluated on its own facts

Statutory Basis: National Green Tribunal Act, 2010

Section 20 – Application of Environmental Principles

The Court placed strong reliance on Section 20 of the NGT Act, which mandates that the Tribunal shall apply:

  • Sustainable Development Principle

  • Precautionary Principle

  • Polluter Pays Principle

The Court held that these principles provide the NGT with wide, flexible, and discretionary powers to mould relief.

Polluter Pays Principle and Discretion of NGT

The Supreme Court held:

“The statutory scheme vests the NGT with the discretion to mould the relief guided by the ‘polluter pays’ principle, having due regard to the scale of the offending activity and the capacity of the violator.”

Importantly, the Court ruled that:

  • There is no requirement for a uniform formula for computing EC

  • Compensation must reflect both environmental harm and economic capacity

Caution Against Mechanical Application

While upholding the NGT’s approach, the Supreme Court issued a cautionary note:

  • Project cost or turnover cannot be applied mechanically

  • They should not be used as a “blunt instrument”

  • EC must be determined using:

    • Expert-driven assessments

    • Guidelines-based methodologies

    • Proportionality and reasonableness

This ensures compensation is non-arbitrary and legally sustainable.

Constitutional Provisions Involved

Article 21 – Right to Life

Environmental protection has been consistently read into Article 21, recognising the right to a clean and healthy environment as part of the right to life.

Article 48A – Directive Principles

Mandates the State to protect and improve the environment.

Article 51A(g) – Fundamental Duties

Imposes a duty on citizens and entities to protect the natural environment.

Final Directions of the Supreme Court

The Court found the NGT’s action in both cases to be:

  • Reasoned

  • Proportionate

  • Consistent with the polluter pays principle

It directed:

  • Both companies to deposit the compensation amount

  • Payment to be made to the Maharashtra Pollution Control Board (MPCB)

  • Compliance within three months

Significance of the Judgment

This ruling:

  • Strengthens the enforcement powers of the NGT

  • Sends a clear signal to large infrastructure and real estate developers

  • Establishes that economic gain and environmental responsibility must go hand in hand

  • Reinforces that environmental violations are not a cost of doing business

Conclusion

The Supreme Court’s decision marks a decisive shift towards impact-based environmental accountability. By recognising project cost and scale as valid factors, the Court has ensured that environmental compensation is not symbolic but deterrent in nature.

The judgment reinforces the principle that the bigger the project, the bigger the responsibility — and that environmental compliance is not optional, but constitutionally mandated.

Location: Pune, Maharashtra, India

Comments

Post a Comment

Popular posts

Father of RG Kar Victim Loses Faith in Legal System Amid Allegations of CBI Inconsistencies

Image
  A Father’s Frustration with the System The father of the 31-year-old postgraduate doctor who was raped and murdered at Kolkata’s RG Kar Medical College on August 9, 2024, has publicly expressed his deep disillusionment with the Indian legal system. In a powerful and emotional statement, he told ANI that the Central Bureau of Investigation (CBI) has presented contradictory reports in two different courts—the Calcutta High Court and Sealdah District Court. “This is not just a failure of investigation—this is a betrayal. Even Supreme Court judges could not believe the differences in what the CBI is saying. We had faith in the agency, but now, we are losing all hope,” he stated. Allegations of Withheld Evidence The father alleged that the CBI is deliberately withholding key details about the case, despite reportedly knowing who the perpetrators are. He believes the answers lie in his daughter’s phone, which the CBI claims it does not possess—an assertion he disputes. According t...
Read more

Bill Gates Applauds India's 'Namo Drone Didi' Program: A Game-Changer in Rural Empowerment and Agri-Tech

Image
Microsoft Founder Bill Gates Lauds India’s Namo Drone Didi Program In a strong endorsement of India’s evolving rural development model, Microsoft founder Bill Gates has praised the Namo Drone Didi initiative, launched in 2023 by the Government of India. The program empowers rural women by training them to operate drones for agricultural purposes, thereby boosting productivity, reducing manual labor, and enhancing socio-economic inclusion. Gates shared a detailed video and blog highlighting his interaction with three "Drone Didis" from Bihar— Sangita Devi , Sumintra Devi , and Kajol Kumari —during his visit to Delhi last month. He applauded the initiative's early success and expressed optimism about its future scalability. What is the Namo Drone Didi Program? Launched under the vision of Prime Minister Narendra Modi, the Namo Drone Didi scheme is part of a broader strategy to promote women-led development and precision agriculture . It aims to provide 15,000 dro...
Read more

Encroachment on Public Land: A Growing Threat to Governance and Public Welfare

Image
Encroachment of public land has become one of the gravest challenges in India’s urban and rural governance. From roads and footpaths to village ponds and forest areas, illegal occupation of land not only undermines the rule of law but also threatens environmental sustainability, public resources, and the right to equitable access. The recent directive from the Allahabad High Court , ordering the removal of encroachments from public land within 90 days across Uttar Pradesh , marks a crucial step toward restoring accountability and protecting common property. Allahabad High Court’s Landmark Order In a public interest litigation (PIL) filed by Manoj Kumar Singh , it was alleged that a village pond in Chauka village of Mirzapur district was encroached upon by locals and that the administration failed to take action. The bench led by Justice P.K. Giri , in an order dated October 6, 2025 , directed the Uttar Pradesh government to remove all encroachments from public or utility lands wi...
Read more

Flight Operations Disrupted Amid India-Pakistan Tensions: Air India and IndiGo Cancel Multiple Flights on May 13, 2025

Image
🔹 Flight Cancellations Announced by Air India On Tuesday, May 13, 2025 , Air India officially announced the cancellation of two-way flight operations to and from the following eight airports : Jammu Leh Jodhpur Amritsar Bhuj Jamnagar Chandigarh Rajkot The airline posted a statement on its official X (formerly Twitter) account, stating: "In view of the latest developments and keeping your safety in mind, flights to and from Jammu, Leh, Jodhpur, Amritsar, Bhuj, Jamnagar, Chandigarh and Rajkot are cancelled for Tuesday, 13th May." Air India further assured passengers that they are closely monitoring the situation and will provide timely updates as operations resume in the coming days. 🔹 IndiGo Follows with Six Airport Cancellations Following Air India's decision, IndiGo Airlines also issued a travel advisory cancelling its flight operations for May 13, 2025, at the following six airports : Jammu Amritsar Chandigarh Leh ...
Read more

Your Complete Online Guide to Land Records and Services in Bihar

Image
Introduction: The Shift Towards Digital Land Governance India’s land management system has traditionally relied on manual records maintained at local government offices. While foundational to governance and ownership, this manual system often led to bureaucratic delays, land disputes, and lack of transparency. Recognizing these issues, state governments across India have progressively adopted digital systems to make land-related services accessible, transparent, and efficient. Bihar Bhumi Portal: A Digital Leap in Land Management One of the leading examples of this digital transformation is Bihar’s Bihar Bhumi portal ( https://biharbhumilrc.com/ ), developed and maintained by the Revenue and Land Reforms Department of Bihar . The portal has become a centralized platform providing a wide range of land-related services to citizens, eliminating the need for in-person visits to land offices. Purpose and Vision The key objective behind launching the Bihar Bhumi portal was to empower...
Read more

Equality Before Law

Image
                            Equality Before Law                                                   Introduction The rule of law was firstly introduced by A.V. Dicey in  his book "The Constitution Of England" in which there is rule which only prevails is law in which all are equal. In simple word if any wrong is being done which is not justifiable  by law committed by anyone that may be president, prime minister, or any individual are punishable because there is supremacy of law. Supremacy of law means the government which is power or the people who elected the government all will be treated equally before law.  Article 14 The Indian Constitution 1949, Article 14 guarantees "Equality before law The State shall not deny to any person equality before the law or the...
Read more

Rights of a Arrested Person in India

Image
One of the basic and important feature of our legal system in benefits goes to arrested person on the principal of presumption of innocence of the accused person until he/she found guilty at the end of trail on legal evidence. Rights include the rights of the accused at the time of arrest, at the time of search and seizure, during the process of trail and the like. In well known case of Meneka Ghandhi v. UOI it was interpreted that the procedure adopted  by the state must be fair, just and reasonable. The certain rights which arrested person need to know are as follows: 1. Right To Silence "it was essentially right to refuse to answer and incriminate oneself in the absence of proper charge. Not initially, the right to refuse to reply to proper charge." the Justice Malimath Committee. The dependent if he so desires can be witness in his trial. His confession in police station is not admissible in court. Only to the magistrate is admissible. The Indian constitution guarantees e...
Read more

Supreme Court Advocates for Childcare and Feeding Rooms in Public Spaces

Image
Supreme Court Advocates for Childcare and Feeding Rooms in Public Spaces The Supreme Court of India has suggested that the Union Government develop a comprehensive policy addressing the construction of feeding rooms and childcare facilities  in public places. This move aims to ensure that nursing mothers and their children can access basic amenities in a dignified and private manner, reinforcing their fundamental rights under the Indian Constitution. SC Encourages Policy Formulation A bench comprising Justice BV Nagarathna  and Justice N Kotiswar Singh  highlighted the absence of a structured framework to address this pressing issue. The court advised the Centre to propose a policy that could then be implemented across the states, scheduling the next hearing for December 10, 2024.   The apex court emphasized that before issuing formal directions, it was crucial to understand the Centre’s perspective on implementing the petitioner’s demand for childcare and feedi...
Read more

Evolution of Constitution under Article 14 to 18

Image
 Evolution of Constitution under Article 14 to 18 INTRODUCTION The idea of equality referenced under Article 14 to Article 18 upgrades a more extensive idea and a more extensive part of the examination as the subject of equity itself shapes a vital and powerful idea in itself. The idea of fairness overwhelms the exceptionally two significant ideas of equivalent security of law and equity under the steady gaze of the law. Likewise, the idea of uniformity wins in a wide range of establishments and accommodates equivalent freedoms for people with the abrogation of unapproachable and nullification of titles. The idea is a more extensive methodology as it is significant for society to look to each individual with a similar methodology regardless of his sexual orientation, rank, and religion. The law is visually impaired and is equivalent for each individual as it says that balance wins for each individual and each individual has the option to be secured by the law. Evolution  The f...
Read more

Supreme Court Allows Collection of Voice Samples from Witnesses — Not Just Accused Persons

Image
In a significant development that clarifies an important aspect of criminal procedure, the Supreme Court of India has ruled that a court can order voice sample collection not only from the accused but also from witnesses , if such evidence is necessary for a criminal investigation. The ruling further strengthens the scope of forensic evidence admissibility while ensuring that such orders do not violate the constitutional protection against self-incrimination. Voice Samples Do Not Amount to Self-Incrimination A bench comprising Chief Justice of India Bhushan R. Gavai and Justice K. Vinod Chandran observed that the act of furnishing a voice sample does not violate Article 20(3) of the Constitution, which protects an accused person from being compelled to be a witness against themselves. The bench clarified that providing a voice sample falls in the same category as submitting fingerprints, handwriting, or signature specimens , none of which amount to testimonial compulsion. Quoti...
Read more